If you didn’t see the 90 minute MacWorld keynote here is a quick summary of the product launches yesterday. Jobs photo courtesy of Apple.

Ad: Hi I’m a Mac and I’m a PC — New Years ad ran which poked fun at Vista…what are you going to do in ’08… Then Jobs enters stage.

Time Capsule: backup hardware device the same size as the Apple TV product. Two models both include Airport 802.11N in a 500MB and 1TB configuration. Priced at $299 and $499 works in conjunction with Time Machine (back up system) which is included in OS X Leopard.

iPhone: 4M sold in the first 200 days (averaged ~20K/day); currently has 19.5% MSS (more than combining the bottom three companies – Palm (9.8%); Motorola (7.4%); Nokia (1.3%). Enhancement announced:

Free software update for all current owners which include the above enhancements

iTunes: 4Billion songs sold through iTunes; Christmas day sold 20M songs in one day – highest ever; 125M TV shows sold (more than any other service); 7M movies sold (more than anyone, but didn’t meet expectations). Enhancements announced:

iTunes Movie Rental (music users have not wanted music rental); Studio’s on board at launch (20th Century Fox, TouchStone, Miramax, MGM, Lions Gate, New Line Cinema, WB, Disney, Sony, Paramount, Universal – essentially all of the studios; More than 1000 films by February

Service started today in the U.S. and goes International later this year

Apple TV: stated that we’ve all missed (Microsoft, Netflix, Nubu and other logos on screen) how to get the movies to the flat panel in the living room. Apple TV was designed as an accessory for iTunes & computer, but it’s about Movies, Movies, Movies. Enhancements announce:

Price dropped from $299 to $229

All new user interface

Leverages the new iTune movie rental service

Rent directly from the Apple TV box – no computer needed now

Photo from Flickr can be streamed or from your dot mac accounts

Will auto sync with your computer if you want

Free software upgrade to all existing users and get the functionality

20th Century Fox: Jim Gianopolos (Chairman & CEO) on stage to discuss movie rental deal. Talked about biz models being super important, gushed about how great it is to work with Jobs and put a major plug in for Blu-ray winning the format war as the crowd applauded.

MacBook Air: launched a new ultra-thin MacBook to compliment the notebook line up. Standard model priced at $1799. Model with the 64GB SSD flash over $3K,. Compared the “Air” to the Sony TZ series which had previously set the benchmark in this category. The thickest part of the Air is thinner than the thinnest part of the Sony for comparisons. Features:

.76 to .16 thin (no optical device, can get one external if you need)

13.3 inch LCD back light display

Full size and backlight keyboard

Multi-touch (similar to the iPhone – swipe, pinch etc.) capability on the trackpad

80GB HDD and optional 64GB SSD (pricey however)

2GB memory and 1.6GHz Core 2 Duo (C2D) standard or optional 1.8GHz

802.11N and Bluetooth 2.1 with EDR

Usage model changing and driving wireless even for software download – now leverage a PC optical drive across the network

Intel: Paul Otellini was invited on stage to evangelize the 30% reduced form factor of the C2D. Gave Jobs a souvenir of one and gushed about how great it was to work with Apple. For those of you into little known factual tidbits, it was interesting to note that the video graphic overlay while Paul walked on stage used the old Intel dropped “e” logo. The graphic/name/title on the projected stage TV was correct.

Summation: In the first 2 weeks of the New Year Apple launched:

Fastest ever Mac Pro desktop system

Time Capsule

Software updates for iPhone, iPod Touch along with new apps for Touch

iTunes Movie Rental

Apple TV (software upgrade) along with HD video content

MacBook Air – Ultra thin laptop

Last slide stated…And there’s still 50 weeks left….

Randy Newman: Music artist extraordinaire played a couple songs for the audience. Newman photo courtesy of YouTube. He starts by telling us about his trip to Europe, where he noticed that “they don’t like us so much.” And he sang a song he wrote about it…”A Few Words in Defense of Our Country.”

A couple of parting thoughts about Randy Newman.The song choice was odd. If Apple signed off on the first song he sang they have some guts. A little piano ditty that compares the U.S. to Nazi Germany, Stalinist Russia and Europe during the time of the Inquisition. Now that’s an interesting mix of art meeting commerce.Highly political and bashed a number of things which will only add to the blog fodder I’m sure.

By now you’ve read about Warner Bros. Entertainment announcement to drop HD DVD and focus on Blu-ray, a Sony Corp. backed technology vs. rival Toshiba.Warner was the last major studio to put out movies in both formats and after May they will exclusively release on Blu-ray.

The announcement by Warner rattled the industry nerves to the point that the N.A. HD DVD Promotional Group (which included Intel and Microsoft) canceled a major media event.Who would blame them?It’s not the kind of exciting news for what’s to come in 2008!

I predicted Sony would not allow the “Betamax” struggle to repeat and that Blu-ray would prevail (HERE).No need to bore you with the technology advantages of each format.Ironically HD DVD has better interactivity today than Blu-ray, but that will evolve with BD Live.I also observed evidence of a move of desperation during the holiday season when Toshiba HD DVD players flooded the market at $179.99.Then Sony countered and jumped on the price discounting wagon with their BDP-S300 (entry level player) at Costco for $278.99 after a $100 rebate.A $100 premium and never mind it didn’t support 7.1 audio.

So what will Microsoft do now?Speaking to Reuters, Albert Penello, group marketing manager for Xbox hardware, said in response to a question about Microsoft possibly supporting a Blu-ray accessory if HD DVD failed that they would consider it. According to Engadget during holiday ’07 consumers purchased 92K HD DVD players for the xBox 360.I believe Microsoft really wants the market to shift to digital download (aligns with xBox 360 content download service and their xBox 360 IPTV directions) and the format war was likely viewed as a gift which stalled adoption, create consumer confusion while digital download services improve.

What is really important to most consumers is that the Warner announcement translates to the release of more movies which we want to watch (rent/buy) in stunning hi-def.Now that the format battle is over I can plan on the Blu-ray release of Lord of the Rings (LOTR).New Line (parent Time-Warner) will make this happen in ’08.

And if all this wasn’t enough good news for the week, Sony demoed at CES the “next generation” of portable cinema viewing.Samples of Blu-ray movies were successfully copied from a PlayStation 3 Blu-ray drive to a PlayStation Portable’s memory stick, as part of Sony’s new web-oriented service/approach to interactivity and play anywhere portability known as BD Live.Other abilities include ring tone downloading and other media content to a BD Live media player.One issue is that current Blu-ray players in the market (including the PS3) do not support BD-Live, but Sony confirmed the PS3 firmware update will be rolling out as early as this month to incorporate BD-Live playback into the system.

Now if Universal and Paramount can see that it makes sense (or is that $cents) to move to Blu-ray we’d be all set for a great hi-def year!

The Las Vegas Consumer Electronics Show (CES) is a tech geek feast with thousands of consumer gadgets, technology, and accessories — far too much to cover in one read. CNET had more than 50 reporters covering the show, however, here are my observations on some relevant companies.

LIVE! — Boasted they were powering the smarter HD experience. HDTV premium cable TV support (with the new ATI TV Wonder); Blu-Ray and HD-DVD playback at 1080p and enhanced audio features with integrated 7.1 audio amplifier. The TV Wonder can handle a number of standards, from NTSC analog television to ATSC over-the-air digital television and, of course, digital cable. The digital tuner is capable of handling all common HDTV resolutions, up to and including 1080p, due to AMD custom chips. Analog tuning capabilities are provided by an ATI Theater 550 chip, while an NXT2003 handles DTV duties. For digital cable, the TV Wonder does no video decompression. It simply receives encrypted data via the cable system and outputs a compressed video stream to the PC. Not just any PC can connect to this TV Wonder. It must meet a stringent set of requirements, including OCUR support in the BIOS and support for HDCP (High-Bandwidth Digital Content Protection). The PC must also be running one of the versions of Windows Vista—Home Premium or Ultimate—with built-in Media Center functionality. Media Center support for OCUR must then be activated with a code, much like Windows Vista activation. Other CES news for AMD here.

IPTV: Microsoft’s Xbox 360 — the video game console will soon get an online television service based on the company’s IPTV software. The service will offer on-demand video, channel guides, digital video recording, and other features. Gates told the CES audience that IPTV providers like AT&T, British Telecom and Deutsche Telecom can now use the Xbox 360 as their set-top box in those deployments. The Xbox 360 can now act as an alternative receiver and recorder. Gaming has always been the supposed killer app of interactive television, so by selling IPTV to the gaming generation, Microsoft may have come up with a brilliant marketing angle.

Blu-Ray/HD-DVD Players: LG (BH100) introduced the first combo Blu-Ray/HD-DVD player. Although expensive at $1,200, the player puts pressure on other deck makers to adopt both formats and, more importantly, allows potential buyers to finally purchase discs according to which movie they like–not which player they own. LG also introduced a $1,199 computer drive, model GGW-H10N, capable of playing HD DVDs and playing and recording Blu-ray discs at up to 4x speed. It can also read and write DVDs and CDs.

Automobile Navigation and Infotainment:Dash Express — is the first portable navigation system to have built-in two-way connectivity (cellular and Wi-Fi), giving drivers access to information via the Internet and the network of other Dash-connected users. The system display real-time traffic data, which comes from the network of other Dash drivers, while Web connectivity gives drivers a points-of-interest database served up by Yahoo Local, with whom Dash announced a partnership last week. Its Yahoo Local search gives drivers access to a points-of-interest database as big as the Web itself, and Dash throws in neat features such as the ability to search for gas stations by fuel price and for movie theaters by showtime.

Sync — In Gates keynote, generated a lot of buzz at the show and a CNET CES award, however, Sync is essentially the Microsoft Blue & Me product announced a year ago with Fiat. Fiat had a one-year global exclusive; now Ford has a one year exclusive in the U.S. market. Sync is more robust according to Microsoft, but it’s missing the GPS navigation feature. Sync is a small, in-dash computer running Windows Automotive, with 256 Mbytes of RAM and a 400-MHz StrongArm 11 processor. More than 50 cars already use Windows Automotive as an in-car operating system. Initially to be made available in twelve 2008 models across the Ford family and across the entire 2009 lineup from FoMoCo, the service will be a fully-integrated, flash memory-based system that enables drivers to call hands-free and to control a range of digital audio via voice commands and buttons mounted on the steering wheel. Microsoft stated that its software will be updatable, probably via the USB port. However, with Blue & Me cars, the user could request navigation instructions using the cellphone. A remote computer parses the request, confirms it’s the address or business you want, then downloads navigation instructions and rudimentary maps, navigating via arrows. The route instructions are spoken through the car speakers; the map information appears on the radio faceplate.

Mobile TV: MediaFlo — Verizon Wireless partnered with MediaFlo to create a truly watchable TV-on-phone experience. V Cast Mobile TV offers full-length, live television programming on selected handsets via a dedicated UHF signal. There’s little of the pixelated, choppy effects of 3G video streaming, and audio/video syncing and channel switching is zippy. I’ve not been a large proponent of steaming TV on cell phones, but the quality of this solution will increasingly get people to use cell phones to watch videos.

HDTV:Samsung — (FP-T5894W) wireless TV, the first of its kind, comes with a separate base station that accepts connections from A/V gear and wirelessly transmits to the 58-inch plasma panel via 802.11n at a range of up to 300 feet. Bit rates up to 150Mbps–plenty for 1080p video. This Samsung is the first big-screen integrated wireless TV I’ve seen. Sidebar: Samsung was the only booth with “no photo” tags everywhere. People ignored the tags, but made me wonder why they had them?

Sharp — claimed to have the world’s largest LCD TV: the 108-inch 1080p Aquos
Sony — BRAVIA Internet Video System. Sony announced this free service to be offered on the majority of new Sony televisions starting with several Bravia LCD TVs. The new televisions will accept an attachable module called the Bravia Internet Video Link, can stream broadband high-definition and other internet video content with the press of a remote control button. Sony said the module will be available summer 2007. Partners include AOL, Yahoo and Grouper, now part of Sony Pictures Entertainment, as well as Sony Pictures itself and Sony BMG. Executives from the first three companies joined Glasgow for a demonstration to show off a range of content from Movies to Sports events and even user generated content. The Sony Xross Media Bar (XMB), an icon-based user interface similar to what is already found on PlayStation 3 (PS3), PSP and a recently introduced Sony A/V receiver, made its debut in conjunction with the Internet video demo. The device doesn’t need a PC.

OLED – Sony had a dozen prototype organic-light-emitting-diode (OLED) screens, on display (see picture). They featured an incredible 1,000,000:1 contrast ratio (compared to ratios of 5,000:1 for conventional LCD TVs) and a 180-degree viewing range, and, most of all, they were super thin—a 27-inch model was only 10-mm thick.

CellSTART — allows users to control keyless entry, remote start and vehicle security systems through cell phones. The product uses proprietary software that provides a graphical interface on the cell phone for functions such as unlocking and locking doors, starting and stopping the engine, and providing notifications to users in the event of vehicle theft. CellSTART was developed by Crayon Interface, and is manufactured and distributed by JBS Technologies. CellSTART is supported by Crayon Interface’s Moshi wireless platform technology. Moshi turns cell phones into remote control and monitoring devices through graphical software downloaded over-the-air to phones and a data network for dispatching messages between cell phones and various devices.

Content: Starz (Vongo) — partnered with Microsoft to bundle/pre-load Vongo’s application on all PCs and Laptops shipped with Vista OS. Vongo is a video downloading service offering unlimited subscription access to hit movies, TV shows, and more, all for just $9.99 per month. Subscribers can browse the video library from a TV set through a networked PC when the TV is connected to a Windows Media Center Extender such as Xbox 360. Users and download the movie and stream it to another part of the home network. Downloads can reside on up to three devices, including laptops and portable media players (based on Microsoft’s Portable Media Center Version 2).

CBS — partnered with Sling Media’s “place-shifting” technology to let users access premium home channels while away from any Internet-connected device, on a test of a service that will allow users to share short segments of CBS programming. The Clip+Sling service will allow owners of Sling Media’s Slingbox device to clip and share content directly from live or recorded TV shows with both other Slingbox owners and others over the Internet.

Sony — BRAVIA Internet Video System a free service to be offered on the majority of new Sony televisions starting with several Bravia LCD TVs. The new televisions will accept an attachable module called the Bravia Internet Video Link, can stream broadband high-definition and other internet video content with the press of a remote control button. Sony said the module will be available summer 2007. Partners include AOL, Yahoo and Grouper, now part of Sony Pictures Entertainment, as well as Sony Pictures itself and Sony BMG. Executives from the first three companies joined Glasgow for a demonstration to show off a range of content from Movies to Sports events and even user generated content. The Sony Xross Media Bar (XMB), an icon-based user interface similar to what is already found on PlayStation 3 (PS3), PSP and a recently introduced Sony A/V receiver, made its debut in conjunction with the Internet video demo. The device doesn’t need a PC.

HDMI v1.3:
The new standard for the highest-quality digital A/V connection, and being dubbed as “the 1080p of 2007.” HDMI Licensing LLC, the company behind the connection, along with Mitsubishi and Dolby, did their best to convince people about the benefits of the new HDMI standard. The net-net: HDMI 1.3 has more than twice the bandwidth of the previous version (10.2 Gbps vs. 4.95 Gbps), which allows manufacturers of all flavors to offer a range of future extras. These can include: Deep Color (HDMI is limited to 8-bit); Wider Color Gamut; support for Dolby and DTS lossless audio formats; Lip-Sync compensation. The only confirmed devices with HDMI 1.3 are the PlayStation 3 and the upcoming Toshiba HD-XA2 HD-DVD player and Epson PowerLite Pro Cinema 1080 projector (model EPM-TW1000).

Operating Systems: Vista RESCUE — hard to miss, from the gigantic Vista banner at the airport, to the exclusive space completely separate from Microsoft’s main booth, promoting the new operating system (Consumer launch set for Jan. 30, 2007). Most all hardware vendors talking about its plans to incorporate Vista in upcoming models so the buzz on the floor is positive and interest seems high.

OEMs: HP — Touch-screen capability is a standard feature in Windows Vista Home Premium, and HP has put it to use in a $1,799 TouchSmart PC IQ770. Many features you’d expect in a midrange all-in-one PC system (DVD burner, Wi-Fi, wireless mouse and keyboard), HP also included an application suite called SmartCenter. The apps include an organizer/calendar and photo-editing software that are all touch screen-driven and ridiculously easy to use. Families will want this.

Sony — VAIO XL3 Digital Living Room System. Included a Blu-ray DVD burner, CableCard support for digital cable reception, and Windows Vista Home Premium. Had a Core 2 Duo, 2GB memory, a 500GB hard drive, and a GeForce 7600 GTL graphics card with an HDMI output. It also comes with both NTSC and ATSC tuners, for analog cable and over-the-air HD, respectively. Not cheap for a $3,300 PC, but Blu-ray burners and Sony-engineered component-style chassis have never come cheap.

Alienware — Area 51 m9750. Core 2 Duo (overclocking is an option) up to 2GB of 667MHz RAM and two 7,200rpm hard drives with up to 400GB total capacity, and two Nvidia GeForce Go 7950 graphics cards in a scalable link interface for fast gaming performance. Laptop is Vista-based w/ 17-inch screen is the first to hit the market with two graphics cards. Also includes an integrated TV tuner as well as a Blu-ray drive. Alienware is trying to hit a price point for less than $2,000–which would make it one of the most affordable gaming laptops.

Home Storage/Servers: HP — a new batch of devices unveiled at the Microsoft keynote is the HP MediaSmart Server (AMD 1.8Ghz 64-bit Sempron processor), which runs Windows Home Server. You can access into the MediaSmart Server from an Internet-connected computer anywhere in the world to access your files and applications, leveraging enhanced security features. With four hard drive bays and four USB ports for external drives, Vista-compatible the MediaSmart Server can be an ideal solution for centralizing and sharing your growing media library.

Hardware & Software Innovation: Powercast(formerly Firefly Power Technologies) — (Pennsylvania start-up; John Shearer, CEO) is looking to change the way we interact and charge our handheld gadgets. They use energy from a transmitted RF signal to power small, battery-operated devices–cell phones and wireless PC peripherals. The transmitter can be placed in anything that plugs into the wall (lamps, alarm clocks, and so on) and can send a low, continuous signal to small gadgets that contain an embedded receiver.

EyeSpot — Offers drag and drop flash video editing direct to consumers and in partnership with companies like Blip.tv and Veoh. Competitor Jumpcut was acquired by Yahoo! last month. From cell phone ring tones to short video clips, online multimedia editing is clearly being bet on as the next step for the YouTube generation. Veoh has Michael Eisner and Overture’s last CEO Ted Meisel on its board. Blip.tv is the foundation of CNN’s new citizen video initiative. Partnerships like this make Eyespot look like VideoEgg, the company that provides browser based video capture to social networking sites from Bebo to Dogster. Liz Gannes reports that Eyespot also has partnerships with Lions Gate Entertainment, Current TV, Zomba/Jive, TVT, Columbia, Epic, Island Records, and Concord Records.

Bones in Motion — location-aware application developer. Launched at DEMO 2006 their first products is BiM Active and BiM Active Online which are fitness tracking and logging solutions for people living healthy lifestyles. Partnered with Verizon Wireless, runners can easily track, store and share running routes and important training information while listening to music on their Verizon Phones.

JuiceCaster — Mobile Social Network. Juice Wireless, creators of the moblogging platform JuiceCaster. As a consumer-facing site, I found it unconvincing – not clear if it’s mobile photo sharing, or moblogging? Perhaps it’s MySpace for cellphones? It’s hard to tell.

WaveMarket — WaveBlog enables consumers to create location-aware multimedia Weblogs with their mobile phones using an innovative map-based interface. Content can be for private use like a family photo album, or published publicly where the user-generated comments and pictures are categorized, ranked and location-tagged to enable dynamic real-time mobile communities. SMS messages link you to the hippest club-goer through the Entertainment Portal community, allowing you to view pictures of club scenes in real-time. Sell your restaurant reservation to someone nearby. Be warned by the Weblog community of pickpockets around the Roman Coliseum. Mobile users will become the biggest sources of location-specific information and media, accessible by mobile phone or PC.

Smarter Agent — combines mobile location technology, such as GPS, with information about real estate, neighborhoods and interesting places around you. By delivering location-relevant content to mobile devices and the Internet, consumers and professionals can learn, interact and transact with the world around them.

ES3 — A method of identifying content properties such that “the content” can be rendered in many different ways targeting the needs of the end-user. Solution increases revenue opportunities for the Content Provider/Portals and increases Broadband efficiencies for the Telcos. Based on “rich” Meta Data, the ES3 method can identify and “remove” undesired content elements at time of rendering and allows for personalization of content by the end-user

Agere — The portable media usage scenario is: user has cellphone, user has portable media device, user wishes portable media device could be integrated into cellphone so user only needs to take with them one device. Agere’s new BluOnyx device, by way of Bluetooth, SD card, or USB, users load up their BluOnyx which wirelessly transfers via Bluetooth to the user’s cellphone for playback. Ability to easily broadcast video to everyone (or just your specified friends) in your vicinity via Bluetooth, or quickly backup your phone to a portable hard drive are interesting ideas, it’s not clear that the novelty is enough to get you to leave your media player at home.

Looking in the mirror at just what objects did appear closer as the year comes to a close, I suspect a key question on your mind is: What is Mac’s prognostication of digital home and general usage trends next year…?

1. Music is THE Application for Mobile Phones

CD-quality music is going to be on more than half the entry-level cell phones used around the world by year-end. Music will be THE application on cell phones measured by consumer use and revenue-generated by handset makers and wireless service providers. Apple proved people will pay for good-sounding music, including hundreds of their favorite songs, easily accessed by simply pressing a button. And these music cell phones will store hundreds and late in the year thousands of songs, which is plenty for the average music fan.

But what about video or Mobile TV adoption? Mobile TV will continue to develop, but will be challenged to win market acceptance because of the small size of cell phone screens. Battery limitations and the small screens make long-term, non-stop viewing unappealing, not a good user experience. The most likely mobile TV applications will be people checking sports scores and updates; cartoons, videos, standup comedy etc., and/or general news. All these will need to fit in about a 3-to-15 minute time frame, according to most industry experts. Many people won’t watch TV on a cell phone for much longer than that, except for some special, out-of-the-mainstream reasons. Mobile TV’s early adopters are expected to be mass transit commuters, primarily Asian and European adults. Look for those countries to be early adopters.

2. Apple iTunes Remains Dominate

Apple will see their iPod market share erode in ’07 from increased competition thanks to Microsoft (Zune), the increased availability of independent video subscriptions (studio’s, broadcasters, news organizations etc.,), and the MTV URGE marketing juggernaut of VH1, MTV and CMT.

The “Leopard” version of the OS will extend Apple MSS to 8% and the FrontRow: media access embedded in the OS along with iTV is what the digital home needs in an interface device. The OS and device will be hugely successful with Apple retail stores able to promoting a compelling value proposition for consuming video content on your schedule…on any device… any time and keep those “buying eye-balls” on iTunes.

The increase in content sources and video quality of the iPod will drive demand for portable video players and subsequently on demand video content. The standard drive size for an iPod will be 100GB by year end. Flash models will ship with 8GB standard and upper end units with 15GB.

The Apple iPhone (Cell phone) will have few new features, but will become big sellers. It won’t be introduced at MacWorld rather it will be mid-year.

3. IPTV Over-Hyped and HDTV Prices Drop as Demand Increases.

The first sub-$500 27-inch LCD HDTV will hit the market. The dramatic price drops are causing consumers to not only upgrade living room sets, but buy additional units for different rooms in the house.

IPTV adoption and speculation will continue to be rampant and over-hyped. Industry pundits will continue to state that it’s right around the corner and that the deals are ramping the industry. New mega-revenue streams don’t exist. There are opportunities for the industry, including programming for non-traditional platforms, but 2007 will not be the year for broad adoption.

4. Blu-Ray and HD-DVD Sales Stall

With no HD-DVD standard concluded, format wars will continue to confuse the consumer and retail is unable to position the differences. Touted as the second coming of the DVD, it’s starting to look a lot like the second coming of the Laserdisc. The inclusion of 1080p support in Playstation 3 (PS3) won’t matter to consumers because there is very little content available and it’s at a premium price.

Speaking of Sony — they will stumble over backwards compatibility with PS2 games and lack of an interactive strategy. Gamers will become further addicted to Xbox 360 combined with Xbox Live, where points and ratings offer a direct comparison of skills against other Xbox Live members, which leaves PlayStation 3 out in the cold. For the console market, 2006 will be game over at Sony.

5. Generation C (Content) Mind Share

In three years, people born between 1980 and 2000, will outnumber Baby Boomers and Gen-Xers. They will be a consumer sector of tremendous importance to the media & entertainment industry. Not only are they big, but they will be fragmented and difficult to reach. The increasing number of media channels – instant messaging, email, social networks, iPods, mobile phones, Tivo, P2P networks, handhelds, video games, etc., – through which this group communicates and consumes media & entertainment, makes them a very elusive target for us to market to them. The characteristics of this generation – one embracing a pervasively digital world – and the implications for media, entertainment, and advertising is going to drive everyone nutty.

Social networking services will morph into something even less useful, like social shopper with coupons and we’ll see sites provide buying recommendations triggered by your profile data.

6. Microsoft Success

Late-February they issue a Press Release proclaiming that “Windows Vista is the best selling operating system ever.” Consumers will love the Vista Media Center Edition with Xbox 360 connectivity in large scale. Adoption rates of Vista with XP customers will be very slow due to computational and memory requirements.

Frustrated with Apple’s market power, the music industry will move aggressively closer to Microsoft. It won’t matter, as the Zune will be deemed the most underwhelming product Microsoft has ever made. And afraid of Microsoft’s market power, the movie industry will try to cozy up to Washington.

Groove collaboration software will ship in the Office suite for the first time. It won’t matter as more significant desktop apps will move to an Ajax/server-based design like Zoho.

We buy a title, not a particular file for a title (so, we buy video once, for all devices)

“Stop, pause, resume, buy, rent, etc.” all work across platforms, devices, and service providers/retailers

Content transcoding is a job for the professionals and the serious hobbyists and the MPEG, H.264, video compression codec’s…whatever, is banned from everyday consumer vernacular

We need to know as much about DRM as we need to know about locks in our bank safety deposit vault

Content (purchased and our own creations) are as safe as credit cards (Meaning we should be angry when someone rips the content that we had to pay for)

I left off the ever important legal prediction…there will be a felony conviction in the U.S. for a crime committed entirely in a virtual world and for the Wiki people, the word “mashup” will be the most overused word in 2007!

There is a format battle brewing between the video-disc players and with no clear winner consumers are going to walk out of stores confused this holiday season and not buy anything.

This past weekend I stood in front of a 50 inch Pioneer Elite plasma, toggling between two 1080P stunning video’s with the absolute best and brilliant image quality offered from a video disc player. One is known as Blu-ray and the other HD-DVD. Before I explain how I walked out of the store dazed and confused about how an industry is doing a re-do (or is that Deja Voodoo?) of previous VHS/Betamax format mistakes…let’s back up some and cover a bit of the technical details.

Blu-ray and HD-DVD are new types of optical discs that provide better image and sound quality than standard DVDs. The discs are read by a tiny blue laser at a shorter wavelength than standard DVDs, which means more digital information can fit onto a single disc. The players retail cost is between $800-$1000.

Traditional DVD format manages a resolution of 720 x 480, for a total of 345,600 pixels. Blu-ray Discs for example can pack in a head spinning sum of 2,073,600 pixels for content recorded in 1920 x 1080 resolution. In case you don’t have a calculator handy, I’ll add it up for you: Blu-ray Discs are capable of six times the resolution of standard DVDs. Blu-ray’s higher bit rate also outshines regular DVDs at 10 Mbps and HDTV broadcasts at 19 Mbps.

The Consumer Electronics Association lowered (twice) their U.S. projected adoption rate for players this year from their hopeful robust holiday season of 600K units to only 200K units. These numbers don’t include video game consoles.

Speaking of gaming consoles, Sony expects to ship 2 million PlayStation 3’s (Blu-ray) by year end which is behind the 10 million shipments of Microsoft Xbox 360, however, very few Xbox 360 (1080i) units were shipped with the $199.99 add-on HD-DVD as it only become available in November. According to NPD, HD-DVD had out sold Blu-ray by 33 percent due to an earlier introduction and more vendors selling the hardware. And why does Microsoft put so much “puffery” behind how the 1080i picture will look identical to a 1080p picture? I’ll save details for another post, but trust me there is a difference between i (interlaced) and p (progressive). Historically, interlacing was first used in TV signals because CRT displays built in the 1940s could simply not work fast enough to draw every line in one-sixtieth of a second. So, has HD-DVD has won, correct?

Not so fast and back on topic. I suspect that a number of consumers are like me. Heads hurt and eyes roll because retail can’t promote the technology without confusion. There is no guarantee that top movies will be released on the format that I want. Not all movie Discs will be encoded at 1080p. I’m fearful of buying an expensive player that may well turn out to be worthless. Remember Laser Disc? And that really smarts…having a lot of $$ tied up in excellent content/movies that become unplayable due to MTBF rates (electronic gear built to fail) and your “format” is no longer supported.

And what’s behind that HD player pricing. For $200 I can buy the HD-DVD add-on for the Xbox 360 which is already attached to the HD TV or pay 3-5 times that amount for a standalone unit. Huh?! Or maybe I should just take the lowest common denominator approach and buy that $79 “up-converting” DVD player, and with all money left over pass out iPod’s like chewing gum stocking stuffers?

I’ve just said no, and will work really hard to convince to be happy and content with a low-rez DVD library for another year.